Sotheby’s Unexpected $30m Van Gogh

Sotheby’s announced over the weekend—through the Financial Times—that it had won the consignment of one of van Gogh’s last still life pictures in private hands. The auction house gave $30m as the low estimate, an astonishing number for several reasons.

First, van Gogh’s Portrait of Dr. Gachet remains the top inflation-adjusted price ever paid for a painting when it sold in 1990 for $82.5m. Some commenters are pointing to the van Gogh sales of the late 1980s as a “ a previous art market peak fueled in no small part by demand from speculative buyers in Japan.” That’s a terrible mis-reading of the Japanese buyers, their motivations and the subsequent fate of those works.

The buyer was anything but a speculator. And the picture has disappeared from the international art market, often the subject of conjecture. More to the point, it was revealed shortly after the sale that buyer and sale were hardly a part of the normal workings of the art market. And profit was the least of the buyer’s motives. The Independent explains:

Early next morning Tokyo time, Ryoei Saito, the head of Japan’s second largest paper manufacturing company, proudly announced that the Van Gogh was his. It had, he said, cost almost double what he had expected, but added: ‘It’s my principle to get what I want, no matter how much money it costs.’

Two days later in Sotheby’s New York branch he paid another dollars 78.1m, this time for Renoir’s Au Moulin de la Galette. Neither painting had been expected to make more than dollars 40-50m. In the West, the prices were dismissed as ludicrous, unfounded, distorting the market. But for Mr Saito, that was the point.

Later he casually remarked that he wanted the Renoir and Van Gogh paintings to be put in his coffin and cremated with him when he died.

It has been well documented that works of art were used as an alternative currency in Japan during their bubble years for providing favors and repaying them in kind. It is possible that the potential buyer of this van Gogh might do something similar with the work. However, these days it is more likely to be purchased by someone who will want credit for having made the acquisition.

The second idea raised by the low estimate is that Sotheby’s—and the consignor—see a real potential for a huge price. The $3om low bar might bring many more interested parties than a substantially higher one.

Finally, it will be interesting to eventually learn whether the work has a guarantee. The low estimate is no indication. Sotheby’s could have guaranteed the work but feel quite confident in keeping estimate low. Indeed, a guarantee would allow the auction house to resist pressure from the consignor to raise estimates as is often the case. But it might also indicate a confident and sophisticated seller willing to take the risk to maximize a sale. We’ll know more on November 4th.